How to Get Into Debt

According to the National Endowment for Financial Education Americans are saving less than they were 2009 are have recently started spending more. According to the Federal Reserve of Boston, the average unpaid credit card balance was $3,389. Approximately 56% of consumers carried an unpaid balance in the past 12 months in 2010. Many Americans have gone into debt and have not been able to save money because of financial crises such as unemployment, salary reduction of sickness. However, others have gone into debt simply because they do not know how to manage their money.

Money habits are usually inherited from parents or family members. If you were not taught how to manage your money while growing up or did not see good example of money managing, chances are you will have bad credit at least once in your Iifetime. Here are some ways to get in debt which increases your chances experiencing a financial crisis and having bad credit.

1. Commit a Crime
2. Spend more than you have
3. Use credit cards for everyday purchases
4. Save less than 20% of your total monthly income
5. Have little or no retirement savings
6. Paying more than 30% of your total monthly income towards debt excluding mortgage or rent
7. Making poor financial decisions
8. Not getting professional financial advice
9. Succumbing to peer pressure or impulse shopping
10. Making excuses for bad behavior or spending habits
11. Blaming others for your bad habits
12. Leasing a car
13. Upgrading a large purchase (car, home, etc.)
14. Having excess (50 pairs of shoes, multiple purse in the same color, clothing or purses that cost more than $50 each)
15. Co-signing for a loan
16. Loaning money to friends and family often
17. Gambling
18. Buying rent-to-own furniture
19. Paying bills late
20. Throwing away receipts and not balancing your checkbook
21. Not verifying your monthly financial statements
22. Repeating the same financial mistakes
23. Buy things you don’t need

Short Term Savings Options

In today’s market there are many options to save money. Due to the recession Americans have learned the hard way that you have to save no matter what your financial situation. There are tons or products available to save money at banks, financial institutions and online. Here are some benefits of using basic products to achieve your short financial goals if you are just starting out as a saver or have a low savings account balance.

Checking Accounts
• Can be used to create achieve financial goals if the account earns interest such as online checking accounts with ING, Emigrant Direct or HSBC
• Can transfer money between accounts with no fees and provide you quick access to your money when needed
• Can be used to achieve short-term goals such as paying down debt, saving for a vacation or doing home repairs
• Can be used to create an emergency fund with 9-12 months of monthly expenses
• Online checking accounts helps you plan in advance since most take 2-5 business days to transfer money from accounts

Savings Accounts
• Have lower interest rates which can vary
• Can be used for short-term goals or to cover unexpected expenses such as car repairs, home maintenance, etc.
• Earn higher interest than regular checking accounts but earn less interest than bonds and CD’s
• Online savings accounts such as ING Direct of HBSC have higher interest rates
• Online savings accounts helps you plan in advance since most take 2-5 business days to transfer money from accounts

Money Market Account
• Can be used as to setup an emergency fund or for short or long term goals such as saving for a down-payment for a home, purchasing a car or starting a business
• Have restrictions on how often you can access the money
• May earn higher interest rates than traditional savings accounts
• Require much higher minimum balances to avoid maintenance fees usually $2,500 and up
• Can write checks
• Interest earned by investing in the stock market so you can lose money

CDs
• Should be kept for one year or less
• Can be used to start a savings account if you don’t need to access the money for a while
• Can transfer the money later to another savings product to earn more money
• Should only be used for short-term financial goals
• Don’t lose money
• Interest rates are fixed and are higher than traditional savings accounts
• Have to keep the money until the CD matures otherwise you will pay a penalty
• Terms can range from 3 months to 5 years

Traditional Bonds
• Provide tax advantages
• Can be used for long term goals to pay for a college education
• Not the best product for saving money
• Should be used in addition to other savings products
• Interest earned may be free from federal taxes if income limits are not exceeded when the bond is cashed
• Provides a lower interest rate than other savings products
• Interest earned is exempt from state and local taxes
• Money cannot be accessed until bond matures
• Interest rates vary based on the market rate

Are You A Victim of the Instant Grati Syndrome

As a baby when you cried your mother or father came running to take care of you. As a toddler when you cried your parents hugged or talked to you until you stopped. As a teenager when you wanted something you talked really nice and sweet to your parents to get it. Throughout your life you may have received gratification instantly so as an adult it is only natural for you to believe that you should continue to receive this treatment. Unfortunately, this attitude affects every aspect of your life even your spending habits.

It can be difficult to resist the temptation of the instant gratification culture of America which I call the "instant grati factor". Advertisers make it easy for consumers to get everything instantly by creating instant cereal, instant coffee, instant meals, instant messaging, instant credit card approval, online shopping, and credit and debit card purchases at most stores and businesses. I have labeled this behavior as the "instant gratification syndrome" or "instant grati syndrome". To determine if you are a victim of "instant grati syndrome" ask yourself the following questions:

1. Do you buy a new outfit every time you go to an event or gathering?
2. Do you go shopping with money already set aside to pay a bill?
3. If you see an item online or in the store do you buy it immediately?
4. Do you buy an item even if you don't need the item or the item is not in your size?
5. Do you buy an item with your credit card even though you know you don't have the money to pay the bill when it arrives?
6. Do you get upset or defensive when someone questions your poor spending habits?
7. Do you rationalize your poor spending habits by saying things like "I work hard I deserve it", "Why can't I have it", "You are not my father, I can buy whatever I want", "I just had to have it", "I don't have to answer to you", "I want it now", or "I can buy it with my credit card"?
8. Is your home filled with unused items you purchased or items that still have the tags on them?
9. Do you hide items you have purchased from your spouse, children or significant other?

If you answered yes to any of these questions you are a victim of the "instant grati syndrome". Here are 6 ways to avoid the "Instant Grati Syndrome:"

1. Make being debt free your ultimate goal
2. Stop listening to the instant gratification messages from family, friends and advertisements
3. Live your life like an investor
4. Surround yourself with people who are investors or people who are in a better financial situation
5. Enjoy the little things in life
6. Stop being depressed
7. Live like the rich who live like the poor

Embrace the values of your grandparents or great-granparents by working hard and saving your money to buy something. So the next time you buy something with a credit card ask yourself, am I a victim of the "instant grati" syndrome?

Savings Options for Short Term Goals

In today’s market there are many options to save money. Due to the recession Americans have learned the hard way that they have to save no matter what their financial situation. There are tons or products available to save money. Here are some benefits of using basic products to achieve short goals.

Checking Accounts
• Can be used to create achieve financial goals if the account earns interest such as online checking accounts with ING, Emigrant Direct or HSBC
• Can transfer money between accounts with no fees and provide you quick access to your money when needed
• Can be used to achieve short-term goals such as paying down debt, saving for a vacation or doing home repairs
• Can be used to create an emergency fund with 9-12 months of monthly expenses
• Online checking accounts helps you plan in advance since most take 2-5 business days to transfer money from accounts

Savings Accounts
• Have lower interest rates which can vary
• Can be used for short-term goals or to cover unexpected expenses such as car repairs, home maintenance, etc.
• Earn higher interest than regular checking accounts but earn less interest than bonds and CD’s
• Online savings accounts such as ING Direct of HBSC have higher interest rates
• Online savings accounts helps you plan in advance since most take 2-5 business days to transfer money from accounts

Money Market Account
• Can be used as to setup an emergency fund or for short or long term goals such as saving for a down-payment for a home, purchasing a car or starting a business
• Have restrictions on how often you can access the money
• May earn higher interest rates than traditional savings accounts
• Require much higher minimum balances to avoid maintenance fees usually $2,500 and up
• Can write checks
• Interest earned by investing in the stock market so you can lose money

CDs
• Should be kept for one year or less
• Can be used to start a savings account if you don’t need to access the money for a while
• Can transfer the money later to another savings product to earn more money
• Should only be used for short-term financial goals
• Don’t lose money
• Interest rates are fixed and are higher than traditional savings accounts
• Have to keep the money until the CD matures otherwise you will pay a penalty
• Terms can range from 3 months to 5 years

Traditional Bonds
• Provide tax advantages
• Can be used for long term goals to pay for a college education
• Not the best product for saving money
• Should be used in addition to other savings products
• Interest earned may be free from federal taxes if income limits are not exceeded when the bond is cashed
• Provides a lower interest rate than other savings products
• Interest earned is exempt from state and local taxes
• Money cannot be accessed until bond matures
• Interest rates vary based on the market rate

Are Smart Phones As Safe as Computers

I must admit, I was not a supporter of smart phones. I was quite happy with my cell phone that I only used to make phone calls or send a few texts. Then, my cell phone died and I was forced to get a new one. I got a new one for personal use then decided to get a smart phone for business use. I went shopping and got excited at a sale that offered me a free phone with access to the internet, texting options, applications, fun games, video recording, a camera, the ability to access my email and more. I was hooked. Now I am a big fan of smart phones and because of that I never let my smart phone out of my sight.

I don’t make transactions on my smart phone, I don’t text personal information, SSN, addresses or account numbers on my smart phones and I don’t fill out application forms, i.e. contests, event registrations, etc. on my smart phone. Some smart phones owners believe they can use their smart phone just like their computer, unfortunately you can’t. Many smart phones have high security risks such as the Android and iPhone. In addition, you don’t how the company stores the data, where the data is stored, if the data is encrypted, If the data is backed up on a regular basis, how long the data is stored, etc.

According to a Trend Micro Inc. survey in 2009, only 23% of smartphone owners use the security software installed on the devices. If a smart phone is lost or stolen, sold, repaired, recycled, or has a removable SIM card data can be quickly exposed without the previous owners’ knowledge. If you store personal information on your smart phone your life could be ruined.

Smart phones are also exposed to hackers, worms, viruses, trojans and malware just like computers. Most smart phone owners don’t bother backing up their data or downloading the latest software. Here are 9 common risks with smart phones to be aware of.

1. Password. Not creating a password for your phone allows anyone to pick up your phone and access your texts, emails, calendar, and other personal information. When entering your password make sure no one is watching you. Create a password with letters and numbers with no repeat values.
2. Inactivity/Lock. Enable the auto lock feature on your phone to prevent someone from accessing information on your phone. You can also set your phone to lock after short periods of inactivity.
3. Encryption. Contact your vendor to find out if the company uses encryption to protect customer data. Most major smart phones vendors use encryption.
4. Data. Don’t store or enter personal information on your smart phone. Don’t make purchases on your smart phones. Even if the website you are using is secure, it doesn’t mean you smart phone is secure.
5. Software. Check at least once month to ensure your smart phone has the latest version of software and patches.
6. Storage. Delete old emails and text messages at least once a week from your smart phone even if you have paid for ample storage to minimize security breaches.
7. Shut down. Cut your phone off each night to reduce exposure to security risks.
8. Downloading. Downloading applications from unknown websites increases your exposure to worms, viruses and malware.
9. Texting. Texting your smart phone number to get ring tones, advertisements, alerts or notifications or to vote also increases your exposure to security risks as well as telemarketer advertisements. Your personal information is sold to telemarketers including your smart phone number.

What to Do If Your Credit Card is Hijacked

I bank with a credit union and got a call yesterday evening from the Security Department. The representative stated that it looks like some unusual charges were on my account. He verified with me that the charges were not mine. Someone had gotten my credit card number and had a field day. My credit card is still in my possession and the last purchase I made was two ½ weeks ago.

I never shop at unknown websites and don’t make a lot of online purchases. I always shop at well-known sites such as department stores, Amazon, etc. I was shocked that someone compromised my card because I only use my card to make occasional online purchases, pay for hotel reservations or airfare. I prefer to use my credit card to make these purchases in the event that my check card is compromised I won’t lose cash. Protect your personal information as you would your life. If you are a victim of identity theft here are 8 tips to minimize damage.

1. Report identity theft immediately. You only have a limited amount of time to report the incident, usually a few days.
2. Contact Equifax, Experian and TransUnion and tell them you were a victim of identity theft. They will provide you with a free copy of your credit reports. Dispute any accounts that are not yours. Place a fraud alert on your credit reports if the fraud happened within the past 12 months. You will get an initial alert placed for 90 days then call back to ask for an extended alert which can last for up to 7 years.
3. File a police report within a few days of becoming aware of the identity theft. This will be helpful when contacting Experian, Equifax and TransUnion as proof of your claim of identity theft.
4. File a complaint with the Better Business Bureau, your state's Consumer Affairs or Attorney General's Office and Postal Service.
5. File a postal alert with the post office which can be filed online at usps.com.
6. Request a copy of the investigation findings from the police department and the company where the fraud occurred. Ask the company to send you a letter stating you were a victim of identity theft and send a copy send to Equifax, Experian and TransUnion.
7. File a fraud claim with the loss mitigation department where the fraud occurred (ask for signature verification which is a quicker way to resolve the issue). You can also contact the Customer Service department and have them put a flag on your account. Sometimes different departments do not exchange information.
8. File an identity theft complaint with the Federal Trade Commission online at ftc.gov.

Here are 6 tips to prevent identity theft.

1. Reduce usage of online banking, pay for more items with cash and use your debit/check card less often. It is easier to get money credited back to your account when using a credit card than when using a debit/check card.
2. Don't enter or store your personal information on your cell phones, blackberry, or in an unsecure place such as work, your purse or wallet. Don’t text your credit card, financial account numbers or SSN. Don't enter your personal information in contests or on the internet. Don’t make purchases using your blackberry or cell phone.
3. If you become a victim of identity theft due to a company security breach, consider closing your account and take your business to another company.
4. Check your bank statements and accounts online or over the phone at least once a week to make sure your account has not compromised.
5. Shred all financial statements and documents that contain your personal information.
6. Create a password on your bank checking and savings account when performing transactions in a branch and when calling the automated number or when calling customer service to verify your identity to prevent others from accessing your account.

Buying Groceries With No Money

Experiencing financial crises can make people do crazy things. Some people are in denial about the financial situation, some people go shopping to make themselves feel better, others find comfort in various activities such as eating, drinking, etc. One thing I have noticed and got additional feedback from grocery store managers is customers who try to buy groceries with no money. This seems to be a big problem that many grocery stores and other stores face – customers who pick up items and get to the checkout line with no money or not enough money to pay for the items.

Going to the grocery store and getting a basket full of groceries when you don’t have enough money is a waste of time and shows a lack of common sense. Grocery stores are in business to make money, I haven’t heard of any grocery store giving away groceries.

Getting a basket full of groceries and not having money to pay for them is a waste the store’s time, it wastes your time, causes you unnecessary frustration and embarrassment and angers the customers in line behind you. Due to your actions, the store now has several voids on their financial records and sees the voids as a loss. To make up for losses the store raises prices so when customers go to the store the next week or two, they will see higher prices.

Many stores have websites where you can go online to see how much items costs. If you don’t have access to a computer you can go to the store and write down the prices of the items you need to buy. The next time you have to get groceries take a calculator or pen and paper with you and tally up the items you put in your basket so that you know approximately how much your bill will be before you get to the checkout line. Here are 15 tips for those who don’t have enough money to buy groceries.

1. Budget. Create a budget and include groceries in your budget. This will help save money on and ensure that your money goes the furthest to buy wisely and healthy items for your family.
2. Don’t steal. Going to jail and having a criminal record will only make your situation worse.
3. Food bank. Go to a local food bank in your area if you can’t afford to buy any groceries.
4. Use coupons. Use coupons found in your local newspaper or use online sites such as groupon.com, coupons.com, couponmom.com to find coupons. Shop at stores that double coupons to save even more money.
5. Shopping List. Make a shopping list of the things you absolutely need. Make a list of things you would like. Buy all the items you need first and if you have money left over use that to buy some of the things you would like to have. This also prevents impulse shopping.
6. Hungry. Don’t go shopping when you are hungry; you tend to buy more items than you normally would or tend to buy more unhealthy items.
7. Network. Get to know your grocery store employees and managers. Ask them when they will be having sales and what days are the best to shop for sales.
8. Shopping. Comparison shop to see which stores have the best sale each week and shop at that store for the items you need. Don’t spend a lot of time and gas shopping at multiple stores to find bargains especially with the increasing gas prices.
9. Generic. Buy generic instead of name brand to save money.
10. Family. If you have a family or 3 or more buying in bulk saves you money but if you are single or a single parent with only one child buying in bulk may not always be the best option.
11. Plan Meals. Plan you meals for the week and shop according to your meals. This helps you stay focused and prevents you spending more money than you should.
12. Stay focused. Stay focused when shopping and stick to your list. Don’t go down every aisle because this can be tempting and don’t buy items just because they are on sale if they are not on your list.
13. Buy in season. Buy fruits and vegetables that are in season. Out of season items cost more.
14. Frozen. Frozen vegetables are a good option if you can’t buy in season vegetables.
15. Kids. Don’t let your kids influence you to buy items that are not on your list. Explain to them that you are at the store to buy certain items and you are not going to deviate from that.

Uncommon Savings Tips

1. When you receive items purchased keep the boxes and reuse them to ship gifts or other items.
2. Reuse both sides of printer or fax paper.
3. Sew clothes for yourself and your family.
4. Crochet pillows, quilts, blankets, sweaters, socks and other items to stay warm.
5. Make jewelry which you can give as gifts.
6. If you are good with arts and crafts make things such as: gloves, pottery, candles, candle holders, envelopes, etc. and give as gifts.
7. Camp out in your backyard in a tent instead of going camping.
8. Participate in clinical research trials to get free medication and earn some extra money.
9. Donate blood to get extra money.
10. Go to a training school for services: beauty school, barber school, dental school or veterinary school to save money on hair care, dental care and pet care costs.
11. Go to a training school or college in less than the normal time, i.e. finish college in 3 years, finish a graduate degree in 1 ½ years, etc.
12. Get sponsors to remodel your home, car, sponsor your family reunion, high reunion or wedding.
13. Make your own food or drinks such as ice cream, soda, bread, beer.
14. If giving flowers as a gift, use flowers from weddings, funerals or other special events.
15. Sell your sperm.
16. Sell your hair to cancer patients.
17. Donate your eggs to women who have problems conceiving.
18. Train you cat to use the toilet like in the movie the Meet the Fockers.
19. Potty train babies at age one or younger.

Rapid Refund Has a Cousin

Rapid Refunds have been called many names such as Refund Anticipation Loan, RALS and now Tax Refund Advance. The Office of Comptroller of the Currency has blocked Hallmark, H&R Block, McAnnally & Company and HSBC from offering rapid refunds because the IRS was unable to determine if a tax filer was credit worthy to receive a rapid refund loan. In the past tax filers who owed taxes were still able to get a refund. The glitch was only found after the rapid refund was received by the tax filer. Chase (JP Chase Morgan) stopped offering rapid refunds in 2010.

In place of rapid refunds, H&R Block now offers RACs, Refund Anticipation Checks that provides tax filers with a refund checks in 8 to 15 days for refund amounts up to $9,999. You don’t pay any interest but the fee is deducted from your refund. You can get the money deposited in your bank account or have a check written in the refund amount. Getting a check will cost you an additional fee. Rapid refunds have very high interest rates starting around 40% up to 500% or more. Tax preparation companies don’t guarantee that you will get your money before the normal wait time from the IRS.

You can save yourself a fee by just being patient and waiting the normal wait time. Jackson Hewitt still offers rapid refunds for refund amounts up to $1,500. Liberty Tax still offers rapid refunds in additional to several accounting firms.

The IRS is taking steps to prevent more tax filers from using rapid refunds by processing tax returns quicker in real time so refunds can be received in 2 to 3 days starting next year. Here are 5 tips to get your tax refund faster and save money.

1. File early. If you expect to get a refund file your taxes as soon as you get your W-2. Early filers receive their refund quicker.
2. Assistance. Use a tax preparation software or get professional assistance from a licensed tax preparer or accountant to prepare your taxes to minimize getting audited or having errors on your tax returns. Many tax preparation software programs now guarantee that you will not be audited and that your tax returns are correct.
3. Direct Deposit. Have your tax refund deposited in your bank account to reduce processing time.
4. File Online. File your tax online by using a free tax preparation site with the IRS or a tax preparation software such as Turbo Tax or Tax Cut that can file your taxes electronically to reduce processing time. You can get your check within 14 days from the IRS or your local state taxing agency.
5. Deposit. Deposit your tax refund check into your bank account and skip using a check cashing store or liquor store to cash your check.

Does Unrest in Other Countries Equal High Gas Prices

Gas prices are rising because of the turmoil in Libya. According to the Department of Energy Libya exports 85% of its oil to Europe and only exports about 3% of its oil to the U.S. However, since Russia provides us with oil which is obtained from Libya we are affected. Luckily Russia is only the 13th provider of oil to the U.S. The top ten countries that export oil to the U.S. are Canada, Mexico, Saudia Arabia, Nigeria, Venezuela, Iraq, Algeria, Columbia, Angola and Brazil.

The war in Libya affects the oil market and many foreign countries are nervous as well as investors and oil companies who fear that wars will erupt in other foreign countries that supply oil to the U.S. The war in Libya has stopped production of approximately 2% of the world supply. Saudia Arabia has increased production since the war began to help with demand.

Unrest in the Middle East and other African countries such as Saudia Arabia, Iraq, Algeria, Angola, and Kuwait that supply oil to the U.S. has also contributed to the increase in gas prices.

The U.S. consumes only 25% of the world oil supply. If the war in Libya continues and oil production remains halted, Europe and other countries would have to get their oil supply from other countries which will result in an increase demand which results in higher gas prices for the world.

There are other factors that contribute to higher gas prices. Some gas stations are forced contractually to raise their prices as soon as oil companies raise their prices. Some gas stations owners anticipate prices will rise and raise their prices in advance to prevent losing money in the future.

Another factor that contributes to high gas prices is the value of the U.S. dollar usually caused by a bad economy indicated by high unemployment rates and lowering of the interest rates by the federal government. When the value of the U.S. dollar decreases, foreign countries can get more for one U.S. dollar. As people in other countries buy more gas, the demand continues to increase which drives up the gas price. All we can do is hope that wars in the Middle East and African countries stops soon.